Carrying Charge

The cost of holding commodities over and above the purchase price. It includes the cost of storage in warehouses and insurance against damage. When commodities are due to be delivered to fulfil the terms of a futures contract the carrying cost also includes charges for ensuring their quality, including sampling, weighing and repairing damage. Also, used to describe a futures market where price differentials between delivery months fully reflect insurance, storage and interest costs.

See also: Commodity